TransCanada puts Keystone pipeline on ice

The Canadian oil company TransCanada has asked President Barack Obama to postpone his review of the controversial Keystone XL pipeline, which would bring oil from Canada to Texas. But as John Dyer in Boston reports, many see the move as a response to the upcoming change of government in Canada — and an attempt to play its opponents against another.

TransCanada is trying to prevent President Obama from rejecting the Keystone XL pipeline before he finishes his term in office in the hopes that a pro-pipeline Republican candidate becomes the next president. (Photo credit: Shannon Ramos, flickr)

TransCanada is trying to prevent President Obama from rejecting the Keystone XL pipeline before he finishes his term in office in the hopes that a pro-pipeline Republican candidate becomes the next president. (Photo credit: Shannon Ramos, flickr)

The Canadian oil company TransCanada is changing tactic over the proposed Keystone oil pipeline and has now asked President Obama to delay his review of the project. If built, the pipeline would bring oil from Canada’s tar sand deposits in Alberta to refineries along the US coast of the Gulf of Mexico. The pipeline is strongly opposed by environmentalists because of the huge environmental cost of the tar sands.

Hopes pinned on Republican president

TransCanada is accused of playing dirty in an effort to prevent Obama from rejecting pipeline before he leaves office on 19 January 2017, thus stealing a victory from environmentalists who have been highly critical of the project and giving a new president a chance to give it the green light. Every Republican presidential candidate supports the Keystone XL pipeline, while every Democratic candidate opposes it. Obama is regarded as highly critical of the project.

“Suspending the Keystone XL permit application at this point would be absurd,” said League of Conservation Voters Senior Vice President Tiernan Sittenfeld in a statement. “This is nothing more than another desperate and cynical attempt by TransCanada to build their dirty pipeline someday if they get a climate denier in the White House in 2017.”

State Department in charge

Technically, the Calgary-based company asked the U.S. secretary of state John Kerry – and not the president – to postpone its review of the pipeline because the State Department is responsible for authorising cross-border construction projects, even when the decision itself ultimately comes from the president.

The project is expected to cost USD 8 billion and would transport 800,000 barrels of oil per day from Canada to Texas.

TransCanada is asking Kerry to postpone a decision on whether or not to construct the project until state officials in Nebraska complete their approval process of a crucial segment of the 1,900-kilometre-long pipeline. Nebraska officials are expected to take as long as a year for their review.

“I note that when the status of the Nebraska pipeline route was challenged last year, the State Department found it appropriate to suspend its review until that dispute was resolved,” TransCanada CEO Russ Girling said in a statement. “We feel under the current circumstances a similar suspension would be appropriate.”

Decision unlikely before UN climate talks

The State Department confirmed that it had received the company’s request but plans to continue its review while deciding whether to accommodate it. Earlier in the day, White House spokesman Josh Earnest said the president could render his final decision on the pipeline as late as the end of his term in office next year.

Environmentalists have been hoping that Obama would kill the pipeline before the UN climate change summit in Paris next month as a gesture showing the world that the world’s biggest economy was serious about confronting climate change. But based on Earnest’s comments, it would appear that the president is unlikely to make up his mind before the UN climate talks

Trudeau wants a UN climate agreement

Republicans in Washington were critical of Obama’s indecisiveness.

“It is clear President Obama was going to deny the permit,” said Senator John Hoeven, a North Dakota Republican who supports Keystone. “The costly delay has prevented the company from proceeding on a new pipeline that would have brought oil to US refineries and jobs and revenue to local communities.”

It’s not clear why Obama has yet to approve or reject the pipeline, but Canadian politics might be playing a role. On 19 October, Liberal Justin Trudeau defeated incumbent Conservative Prime Minister Stephen Harper in Canada’s general election. Harper, who was friendly with oil interests, often clashed with Obama over the need for the pipeline.

While Trudeau is also in favour of the pipeline, which would be a boon to Canadian oil companies, unlike Harper he’s also eager to seal a pact to reduce global greenhouse gas emissions in Paris. He’s also keen to set himself apart from his predecessor when it Canada-US relations and has indicated that he will not risk souring relations with Obama over the pipeline.


Photo credit: Shannon Ramos, flickr/Creative Commons

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